Ticker Tape's Medical Picks
10/23/2002 12:00 am EST
Leo Fasciocco (Ticker Tape Digest) seeks out stocks that are under accumulation and on the verge of breaking out to new highs. His strategy is to buy an initial position as the stock breaks out of a base of accumulation, and then add to positions on continued strength. Two recent such plays are in the healthcare field. Here are his reviews.
“Health Management Associates (
“Technically, the stock has been in a solid up-trend since turning higher after making a trough at 16.50 in July. Most recently HMA pushed through key resistance at 20.50 and is now moving higher. It is not extended and still within accumulation range. HMA is a solid play that is on a steady course of improving earnings. We see the stock at a point to be accumulated as a partial position. Further buying should be done by averaging up in price. We are targeting a move to 30 within six months. A protective stop can be placed near 20.40. We rate the stock a good intermediate-term play with low downside risk.
"Cardinal Health (
"Technically, the stock rallied recently from 48 in July to 68. Since then it has been in an eight-week base with upside resistance at 68. The stock, showing strong accumulation now, is poised to breakout at any time. Importantly, there was heavy accumulation when the stock shook out down to 62 in late September. CAH has upside resistance in the 70s. We expect the stock to push into that area. A key breakthrough would be a move through 76. We suggest a partial position now, with the completion of buying to be done on a breakout over 68. We are targeting CAH for a move to 80 to 84 within six months. A protective stop can be placed near 62.50. We rate CAH a good intermediate-term play suitable for conservative investors."